Good morning-
This is Mark Vickery, subbing for Sheraz Mian while he is away.
This morning, jobless claims numbers hit expectations exactly, and consumer pricing was a tick above estimates. Initial jobless claims hit 410,000 — exactly what was anticipated. The Consumer Price Index (CPI) reached 0.4%, up from the 0.3% anticipated. The core (subtracting food & energy) was up to 0.2%, above the 0.1% expected.
Minor revisions were also made to the December numbers: initial jobless claims last month went up 2,000 to 385,000 — still a psychologically pleasing number below 400,000. And though the core CPI number was up, this was to be expected as of yesterday, when the Producer Price Index (PPI) went up on the core level, inciting a new wave of concern about inflation.
Back to jobless claims, the 4-week moving average — which takes out a lot of the volatility in the numbers — went down 1750 to 417,750. This continues the “slow boat to China” (not literally) of a gradual breaking from the trading range around 450,000 we had been in for virtually all of 2010. And breaking in the right direction, meaning this is another piece of evidence pointing to an improving economy.
Continuing claims (those beyond the initial 26-week period) stayed practically identical from last month: 3.911 as compared to 3.910 last month. That there is not a major leap upward helps the relatively positive narrative that initial claims are not simply being pushed to longer-term unemployment.
Earnings season continues, but relatively few reporting companies capture the headlines at this stage. If the market is to be pushed in one direction or another, it will likely be from the economic numbers this morning. At this hour, futures are flat with a very slight downward bias.
Mark Vickery
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